LITHIA MOTORS INC (LAD) Stock Fundamental Analysis
NYSE:LAD - New York Stock Exchange, Inc. - US5367971034 - Common Stock - Currency: USD
Overall LAD gets a fundamental rating of 5 out of 10. We evaluated LAD against 122 industry peers in the Specialty Retail industry. There are concerns on the financial health of LAD while its profitability can be described as average. LAD is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
LAD had positive earnings in the past year.
In the past year LAD had a positive cash flow from operations.
LAD had positive earnings in each of the past 5 years.
In multiple years LAD reported negative operating cash flow during the last 5 years.
1.2 Ratios
LAD has a Return On Assets of 3.62%. This is in the better half of the industry: LAD outperforms 61.48% of its industry peers.
LAD's Return On Equity of 12.56% is fine compared to the rest of the industry. LAD outperforms 69.67% of its industry peers.
LAD has a Return On Invested Capital (5.71%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for LAD is significantly below the industry average of 12.95%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 12.56% | ||
| ROIC | 5.71% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
1.3 Margins
The Profit Margin of LAD (2.31%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of LAD has remained more or less at the same level.
With a decent Operating Margin value of 4.49%, LAD is doing good in the industry, outperforming 64.75% of the companies in the same industry.
LAD's Operating Margin has improved in the last couple of years.
LAD has a Gross Margin of 15.39%. This is amonst the worse of the industry: LAD underperforms 86.89% of its industry peers.
In the last couple of years the Gross Margin of LAD has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.49% | ||
| PM (TTM) | 2.31% | ||
| GM | 15.39% |
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LAD is destroying value.
LAD has less shares outstanding than it did 1 year ago.
LAD has more shares outstanding than it did 5 years ago.
The debt/assets ratio for LAD is higher compared to a year ago.
2.2 Solvency
LAD has an Altman-Z score of 2.52. This is not the best score and indicates that LAD is in the grey zone with still only limited risk for bankruptcy at the moment.
LAD has a Altman-Z score (2.52) which is in line with its industry peers.
LAD has a debt to FCF ratio of 116.40. This is a negative value and a sign of low solvency as LAD would need 116.40 years to pay back of all of its debts.
The Debt to FCF ratio of LAD (116.40) is comparable to the rest of the industry.
LAD has a Debt/Equity ratio of 1.95. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.95, LAD is doing worse than 68.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 116.4 | ||
| Altman-Z | 2.52 |
ROIC/WACC0.66
WACC8.68%
2.3 Liquidity
A Current Ratio of 1.18 indicates that LAD should not have too much problems paying its short term obligations.
LAD's Current ratio of 1.18 is on the low side compared to the rest of the industry. LAD is outperformed by 60.66% of its industry peers.
A Quick Ratio of 0.31 indicates that LAD may have some problems paying its short term obligations.
LAD has a worse Quick ratio (0.31) than 70.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
LAD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.64%.
LAD shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.64% yearly.
The Revenue has grown by 12.81% in the past year. This is quite good.
Measured over the past years, LAD shows a very strong growth in Revenue. The Revenue has been growing by 23.35% on average per year.
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
3.2 Future
The Earnings Per Share is expected to grow by 13.95% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.69% on average over the next years.
EPS Next Y11.91%
EPS Next 2Y12.43%
EPS Next 3Y12.89%
EPS Next 5Y13.95%
Revenue Next Year5.01%
Revenue Next 2Y5.67%
Revenue Next 3Y6.73%
Revenue Next 5Y7.69%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 10.51 indicates a reasonable valuation of LAD.
LAD's Price/Earnings ratio is rather cheap when compared to the industry. LAD is cheaper than 84.43% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.69, LAD is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.74, the valuation of LAD can be described as very reasonable.
83.61% of the companies in the same industry are more expensive than LAD, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.29, LAD is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.51 | ||
| Fwd PE | 8.74 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LAD is valued a bit cheaper than 63.11% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as LAD.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 75.46 | ||
| EV/EBITDA | 8.61 |
4.3 Compensation for Growth
LAD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as LAD's earnings are expected to grow with 12.89% in the coming years.
PEG (NY)0.88
PEG (5Y)0.51
EPS Next 2Y12.43%
EPS Next 3Y12.89%
5. Dividend
5.1 Amount
LAD has a yearly dividend return of 0.67%, which is pretty low.
Compared to an average industry Dividend Yield of 5.35, LAD pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.43, LAD's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
5.2 History
On average, the dividend of LAD grows each year by 11.85%, which is quite nice.
LAD has paid a dividend for at least 10 years, which is a reliable track record.
LAD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.85%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
LAD pays out 6.67% of its income as dividend. This is a sustainable payout ratio.
LAD's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP6.67%
EPS Next 2Y12.43%
EPS Next 3Y12.89%
331.37
-7.98 (-2.35%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners110.69%
Inst Owner Change10.66%
Ins Owners0.87%
Ins Owner Change-2.11%
Market Cap8.63B
Analysts84
Price Target398.54 (20.27%)
Short Float %5.89%
Short Ratio4.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.67% |
Yearly Dividend2.1
Dividend Growth(5Y)11.85%
DP6.67%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.5%
Min EPS beat(2)-1.6%
Max EPS beat(2)6.59%
EPS beat(4)3
Avg EPS beat(4)5.72%
Min EPS beat(4)-1.6%
Max EPS beat(4)10.88%
EPS beat(8)4
Avg EPS beat(8)0.76%
EPS beat(12)4
Avg EPS beat(12)-1.45%
EPS beat(16)8
Avg EPS beat(16)6.82%
Revenue beat(2)1
Avg Revenue beat(2)-1%
Min Revenue beat(2)-2.33%
Max Revenue beat(2)0.33%
Revenue beat(4)1
Avg Revenue beat(4)-1.94%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.33%
Revenue beat(8)2
Avg Revenue beat(8)-1.55%
Revenue beat(12)2
Avg Revenue beat(12)-1.99%
Revenue beat(16)6
Avg Revenue beat(16)0.34%
PT rev (1m)0.79%
PT rev (3m)-8.77%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)-4.04%
EPS NY rev (1m)0.32%
EPS NY rev (3m)-4.43%
Revenue NQ rev (1m)-0.36%
Revenue NQ rev (3m)-1.13%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-1.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.51 | ||
| Fwd PE | 8.74 | ||
| P/S | 0.23 | ||
| P/FCF | 75.46 | ||
| P/OCF | 18.97 | ||
| P/B | 1.28 | ||
| P/tB | 5.33 | ||
| EV/EBITDA | 8.61 |
EPS(TTM)31.53
EY9.52%
EPS(NY)37.9
Fwd EY11.44%
FCF(TTM)4.39
FCFY1.33%
OCF(TTM)17.47
OCFY5.27%
SpS1413.93
BVpS259.62
TBVpS62.17
PEG (NY)0.88
PEG (5Y)0.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 12.56% | ||
| ROCE | 9.81% | ||
| ROIC | 5.71% | ||
| ROICexc | 5.78% | ||
| ROICexgc | 7.59% | ||
| OM | 4.49% | ||
| PM (TTM) | 2.31% | ||
| GM | 15.39% | ||
| FCFM | 0.31% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
ROICexc(3y)7.8%
ROICexc(5y)8.76%
ROICexgc(3y)10.26%
ROICexgc(5y)11.04%
ROCE(3y)12.38%
ROCE(5y)13.83%
ROICexcg growth 3Y-22.88%
ROICexcg growth 5Y-1.28%
ROICexc growth 3Y-24.14%
ROICexc growth 5Y-3.26%
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
F-Score5
Asset Turnover1.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 116.4 | ||
| Debt/EBITDA | 6.75 | ||
| Cap/Depr | 114.61% | ||
| Cap/Sales | 0.93% | ||
| Interest Coverage | 2.23 | ||
| Cash Conversion | 23.32% | ||
| Profit Quality | 13.46% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | 2.52 |
F-Score5
WACC8.68%
ROIC/WACC0.66
Cap/Depr(3y)135.76%
Cap/Depr(5y)158.69%
Cap/Sales(3y)0.93%
Cap/Sales(5y)1.04%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
EPS Next Y11.91%
EPS Next 2Y12.43%
EPS Next 3Y12.89%
EPS Next 5Y13.95%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
Revenue Next Year5.01%
Revenue Next 2Y5.67%
Revenue Next 3Y6.73%
Revenue Next 5Y7.69%
EBIT growth 1Y-2.36%
EBIT growth 3Y-1.94%
EBIT growth 5Y26.57%
EBIT Next Year17.38%
EBIT Next 3Y14.11%
EBIT Next 5Y11.53%
FCF growth 1Y111.82%
FCF growth 3Y-63.67%
FCF growth 5Y-28.69%
OCF growth 1Y166.36%
OCF growth 3Y-38.16%
OCF growth 5Y-4.12%